NPD: Norwegian shelf production in 2024 could rival record
The Norwegian Petroleum Directorate (NPD) projects that overall production of oil and gas from the Norwegian shelf in 2024 will be close to 2004—a record year—partly due to Johan Sverdrup and the expected startup of Johan Castberg in the Barents Sea in 2022.
In a recap of 2019, the regulator said Johan Sverdrup oil field, which came onstream in October 2019, already accounts for around 20% of Norwegian oil production (OGJ Online, Oct. 7, 2019). While oil accounted for most of the production in 2004, gas will account for about one-half in 2024, NPD said.
“In order to reach this goal, the companies have to approve and initiate measures to improve recovery from fields in operation. Decisions must also be made to develop new fields. They also have to explore for and make new discoveries to develop," said NPD Director General Ingrid Solvberg.
Recap
A total of 57 exploration wells were spudded on the Norwegian shelf last year, four more than in 2018, the NPD said.
A total of 37 exploration wells were drilled in the North Sea, 15 were drilled in the Norwegian Sea, and five in the Barents Sea.
This year, about 50 exploration wells are expected, Solvberg said.
In 2019, a record 83 production licenses were awarded in the Awards in Predefined Areas (APA 2018) across the entire Norwegian shelf. Thirty-three operators submitted applications for APA 2019 (OGJ Online, Sept. 4, 2019). Awards are expected in January.
A total of 17 discoveries were made in 2019, 10 in the North Sea, six in the Norwegian Sea, and one in the Barents Sea. Several of the discoveries are relatively small, NPD said, but they could still provide value. Small discoveries near existing infrastructure can yield profitable developments as they can be considered for tie-in to nearby platforms and pipelines, NPD said.
At the end of the year, there were a record 87 producing fields. Most of the oil and gas still comes from major fields, NPD said. About half of the fields are subsea developments tied into other infrastructure.
“Small subsea fields can also create substantial values. They also help extend the period of profitable production from the host fields,” Solvberg said.
Overall production declined in 2019 compared with 2018 as gas production was lower than expected due to market conditions.
The NPD expects new fields coming on stream, particularly that of Johan Sverdrup, to outweigh oil production decline from many of the other fields. In addition to Sverdrup, Spirit energy-operated Oda and Equinor-operated Trestakk and Utgard came on stream in 2019 (OGJ Online, Mar. 19, 2019; July 16, 2019; Sept. 17, 2019). All three are subsea developments tied into existing host fields.
In 2019, the authorities approved plans for development and operation (PDOs) for seven fields. The largest was the second development stage of Johan Sverdrup. The six others have an overall current value of 38 billion kroner.
Overall investments and costs associated with activity on the Norwegian shelf totaled around 250 billion kroner in 2019. The development of new fields and investments in fields in operation account for most of the activity and use of resources, but extensive amounts were also spent on exploration and operation.
About 60 billion kroner was spent in 2019 to operate fields, pipes, and onshore facilities.
Mikaila Adams | Managing Editor - News
Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was named Managing Editor - News in 2019. She holds a degree from Texas Tech University.